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Colorado Supreme Court Hears Ethics Watch v. Senate Majority Fund

Today, the Colorado Supreme Court heard arguments in a case brought by Ethics Watch in 2008 against the Senate Majority Fund and the Colorado Leadership Fund.  Ethics Watch is challenging a lower court ruling that permits these two 527 groups to run ads in support of state candidates without adhering to political committee contribution limits, simply by avoiding so-called "magic words" such as "vote for" or "defeat." 

This is the first case brought by Ethics Watch to be accepted by the Colorado Supreme Court, and could have a significant impact on communications by future campaigns.Ethics Watch Director Luis Toro issued the following statement following oral arguments:  "Today was a chance for the Colorado Supreme Court to look at the important question of what counts as an ‘expenditure’ under Colorado law.  The implications of this case go beyond just the issue of whether a 527 group can skirt contribution limits simply by avoiding the use of so-called ‘magic words’ like ‘vote for’ or ‘defeat.’  It will also have important implications for disclosure requirements for outside groups that seek to influence state and local elections in Colorado.  We are confident that the Court will agree with Ethics Watch that the voters who enacted Amendment 27 intended to strengthen Colorado election laws, not lock into place an outmoded ‘magic words’ test that has been described as unworkable and easy to circumvent."

Colorado Ethics Watch filed a campaign finance complaint against Senate Majority Fund (SMF) and Colorado Leadership Fund (CLF) on September 10, 2008, alleging that the two "527" political organizations acted as political committees, subject to registration requirements and contribution limits, when they raised money and paid for television and print ads supporting various state legislative candidates in the 2008 election cycle.  Ethics Watch also alleged that the two groups failed to file independent expenditure disclosures for the ads.  On November 30, 2008, Administrative Law Judge Robert Spencer dismissed Ethics Watch's complaint, ruling that none of the spending qualified as an "expenditure" under Colorado law because the ads' advocacy did not include so-called "magic words" such as "vote for."  Judge Spencer's decision was affirmed by the Court of Appeals on March 18, 2010, and Ethics Watch petitioned the Colorado Supreme Court to review the Court of Appeals' decision.

The Supreme Court's order defined the question presented as follows:  "Whether the court of appeals properly interpreted and applied 'for the purpose of expressly advocating the election or defeat of a candidate' as it appears in the definition of 'expenditure' in article XXVIII, section 2(8)(a) of the Colorado Constitution."